European equity markets are up more than 2% and leading U.S futures higher as the market awaits five key data points this morning.

The 10-year Treasury yield four basis points softer at 2.04%, the two-year yield is steady at 0.19%, and the 30-year yield is two basis points softer at 3.29%. 

On Wednesday long-term bonds were most at play, with the 30-year yield falling to 3.29% from 3.37%.

S&P 500 futures are 6.8 points higher (+0.58%) at 1,189 and Dow futures are 60 points higher (+0.54%) at 11,234. 

The market has jumped the last three days, with the S&P gaining 34.5 points, or 2.98%, and the Dow gaining 255 points, or 2.32%.

"German Chancellor Merkel and French President Sarkozy said that they're convinced Greece will remain in the euro area, while European Commission President Barroso said yesterday that they're getting close to a Eurobond proposal," said BMO Capital Markets.

Light crude oil rose 0.60% overnight to $89.44 per barrel, while gold prices fell 1.17% to $1,805.20.

Key Events Today:

8:30 - The four-week average for Initial Jobless Claims was last at 414,750. Weekly claims have swayed between 399k and 421k over the past six weeks; in the period ending Sept 10, economists anticipate 410k new filings. Forecasts range from 400k to 430k.

"While it is apparent that businesses are not conducting large scale layoffs, financial conditions have become less supportive of growth and hiring activity has slowed in response," said Nomura Global Economics.

Citigroup expects weekly filings to drop around 10k, but said there could be "a possible influx" in the wake of Hurricane Irene. 

"The storm affected coastal and inland areas along the eastern seaboard from North Carolina to Maine," Citi said. "Damage estimates have ranged from $8 billion to $16 billion."

8:30 - As with producer costs, the Consumer Price Index is anticipated to rise at a slower pace in August thanks to falling energy prices. This should help confirm that rapid inflation is a diminishing risk, given the slow growth of spending. Overall prices are forecast to rise 0.2%, following a 0.5% jump in July and a 0.2% fall in June. Core prices too are expected to rise 0.2%, after a 0.2% rise in July and a 0.3% pick up in June.

"Consumer price measures have ticked modestly higher in recent months, but we view these increases as the after effects of late 2010 - early 2011 commodity price hikes flowing through the inflation pipeline," said Janney Capital Markets. "Considering that these commodities hikes were largely one-time events rather than sustained rates of price increases, this flow through is likely a temporary happening."

Also pay attention to the owners' equivalent rent component, which accounts for nearly a third of the consumer goods basket within this index.

It's "essentially calculated by taking rental property rates and applying them to estimate the 'equivalent' monthly cost of an individual renting a house which they actually own," Janney said. "With rental property demand increasing at the expense of owned property demand, this owners' equivalent rent calculation is upward biasing the CPI, just as greater housing demand in the middle part of last decade downward biased the CPI."

8:30 - The Empire State Manufacturing Survey is the first regional index to come out each month. Recently it has shown contraction for the past three months, the largest string of declines since the April to June 2009 period when the recession technically ended. In August, the index fell to -7.7 from -3.8; economists expect no real improvement this month with the consensus estimate at -3.5.

Because the survey is released so early, Nomura Global Economics said it can reflect some of prior month's activity. They therefore expect a decline.

"Given the heightened market volatility that prevailed throughout August and continued into early September, we are looking for continued weakness in the regional manufacturing surveys," Nomura said, forecasting a decline to -11.1.

9:15 - A lack of employment growth, slower vehicle assembly, and reduced electricity usage conspired to slow Industrial Production down in August. Economists are expecting a meagre 0.1% advance, following a robust 0.9% jump in July and a 0.4% gain in June.

"Retrenchment in light vehicle production and a downdraft in utility output after a July heat wave should pull industrial production down 0.2% in August," said IHS Global Insight. "Non-vehicle manufacturing should creep higher, but total manufacturing hours worked outside the autos sector went sideways, leaving only modest productivity gains to lift output. July was a generally good month for production, but a repeat of performance in August would not be consistent with barely-above-breakeven ISM-manufacturing readings."

Citigroup points out that even with a soft August reading, the July-August average could be 4.8% annualized above the second quarter. 

"That would be a sharp reversal from the 1.0% rise in the second quarter," Citi said. "The lift from production, along with indications on consumer spending and the trade report, limit the downside to third quarter GDP growth."

10:00 - Just ninety minutes after the Empire State survey, the Philadelphia Fed will release its look at regional manufacturing conditions. It last suffered a staggering drop to -30.7, as every component contracted including double-digit losses among new orders and shipments. Economists expect a smaller contraction this month, with the median estimate at -15. Forecasts are all negative, ranging from -2 to -25.

"We think the August reading exaggerated the weakness in the region because the survey was taken during the debt ceiling negotiations and the US sovereign credit rating downgrade," Citigroup said.